Onto Innovation(ONTO) - 2025 Q3 - Quarterly Results

Financial Performance - Revenue for Q3 2025 was $218.2 million, a decrease of 13.5% year-over-year from $252.2 million in Q3 2024[7] - Gross margin for Q3 2025 was 50.7%, down from 54.1% in Q3 2024; non-GAAP gross margin was 54.0%, compared to 54.5% in Q3 2024[7] - Operating income for Q3 2025 was $23.7 million, or 10.9% of revenue, down from $53.1 million, or 21.0% of revenue, in Q3 2024[7] - Net income for the three months ended September 27, 2025, was $28.224 million, compared to $53.051 million in the same period last year, reflecting a decline of 46.8%[31] - Non-GAAP net income for the three months ended September 27, 2025, was $45.125 million, down from $66.386 million in the prior year[31] - Diluted earnings per share for the three months ended September 27, 2025, was $0.92, compared to $1.34 for the same period in 2024[28] Cash Flow and Assets - The company generated record cash from operations of approximately $83.4 million in Q3 2025, representing 185% conversion of non-GAAP net income[6] - Total assets as of September 27, 2025, were $2.186 billion, an increase from $2.117 billion at the end of 2024[25] - Cash and short-term investments at the end of Q3 2025 totaled $983.9 million, up from $852.3 million at the end of 2024[25] Future Guidance - For Q4 2025, the company expects revenue between $250 million and $265 million, with GAAP diluted earnings per share projected to be between $0.85 and $1.00[10] - Non-GAAP net income for Q4 2025 is expected to be $28.2 million, or earnings per share of $0.57, compared to $53.1 million, or earnings per share of $1.07, in Q4 2024[9] - The company provided guidance for the fourth quarter of 2025, estimating U.S. GAAP operating income between $39.8 million and $48.3 million, with an EPS range of $0.85 to $1.00[32] Research and Development - Research and development expenses increased to $32.493 million for the three months ended September 27, 2025, from $28.277 million in the prior year, indicating a focus on innovation[27] Product Developments - The company shipped initial Atlas® G6 OCD systems to several leading logic and memory customers, with additional shipments scheduled for Q4 2025[6] - The Dragonfly® 3Di™ technology is now fully qualified by two major high bandwidth memory (HBM) customers, with orders secured for 2.5D logic applications supporting AI packaging[6]